Starting your own business can be a rewarding, yet daunting, task. It will take passion and perseverance in order to ensure your business will thrive. Before a business is permitted to operate, it must be recognized under the law which occurs only after proper formation. Steps to form a business vary depending on the type of entity.
A Sole Proprietorship is a type of business is which a single individual owns every asset and assumes all debts of the business. The business does not have a separate existence from its owner. There are no formal requirements needed to form a sole proprietorship as the status comes from the start of business activities. However
A General Partnership is created when two or more persons or entities, as co-owners, carry on a business for profit. No written agreement, formal requirement, nor intent is required to form a general partnership. Thus, persons or entities can inadvertently create this type of partnership despite an express subjective intent not to do so. For example, if the required formalities to form a limited partnership are not followed, a general partnership will result.
A Limited Partnership (LP) is a partnership that is composed of both general and limited partners but must have at least one general partner. A general partner is a person or entity that has unlimited liability and full management control of a business. A limited partner has almost no involvement in management, and their liability is limited to the amount they invested into the partnership.
An LP is formed once a Certificate of Limited Partnership is formed with the Secretary of State. The Certificate of Limited Partnership must include:
If any of these requirements fail to be met, the formation of a general partnership will result.
A Limited Liability Partnership (LLP) is a partnership in which every partner enjoys limited personal liability. Any partnership has the ability to become an LLP if:
A Corporation is an entity that will act as a single, fictitious person. Under the Revised Model Business Corporation Act, a collection of laws designed to regulate interstate corporate affairs, a corporation is deemed to exist on the date in which the Articles of Incorporation are filed with the Secretary of State. The Articles of Incorporation must contain:
Limited Liability Corporation
A Limited Liability Corporation (LLC) is a type of corporation that protects the owners from debts and liabilities of the business. An LLC is formed when:
If you are in the process of establishing a business and need guidance on the business structure or completing the process to register your business, the Lake County law firm of Johnston Tomei Lenczycki & Goldberg LLC can assist with all of your business formation needs. Call our office at 847-549-0600.
Phone Number: (847) 549-0600
Fax Number: (847) 589-2263
350 N. Milwaukee Ave., Ste. 202
Libertyville, IL 60048
2100 Manchester Road, Suite 920
Wheaton, IL 60187